Unintended consequences

Sep 08, 2003

The Social Security Administration has received a fresh reminder of one of the constants of technological progress: the insidious nature of unintended consequences.

For the most part, e-government initiatives have been a boon both to government and the public, improving the quality or efficiency of services without posing new problems for either party. SSA's eVital program, however, is a little more complicated than many initiatives to date.

In this case, the federal government is asking states to provide electronic access to their birth and death records, so they can keep track of who is eligible for benefits. Currently, individuals applying for benefits are required to present birth or death certificates. The agency believes it can do a better job of preventing fraud by accessing that information directly, rather than trusting that the certificates have not been altered.

There's a catch, though. States charge individuals for certified copies of those documents. As the states see it, they are being asked to give up a dependable revenue stream at a time when they are already struggling with major budget shortfalls.

To make matters worse, SSA is offering to pay only $1.50 per record or verification, while KPMG LLP, the accounting firm that conducted a four-month study, recommended a fee between $6 and $9, depending on the transaction, according to state officials.

Clearly, SSA can make a strong business case for eVital, given its real potential for reducing fraud. And putting aside the debate about the actual fee level, it is reasonable to expect SSA to pay only the minimum costs associated with the electronic transaction. The loss of revenue to the states truly would be an unintended consequence.

Still, the federal government needs to remember that with eVital, as with other intergovernmental initiatives, the states are essentially its business partners. And in any business venture, if one partner fails to see a compelling case for taking part — or worse yet, sees good reason not to — the venture is likely to fail.